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Just How Expensive Is Massachusetts Health Insurance?

The Commonwealth Fund has put out a document on “Health Reform’s Potential” to reduce health costs.  It’s interesting — deeply flawed, but interesting.

Let me start by saying that the intended purpose of the report is the part that is deeply flawed… it’s a political treatise, written by a supporter of the Obamacare legislation that will, IMO, totally screw up health care in the US.

It talks about the cost savings under Obamacare (which it calls “reform”), but let’s look at Massachusetts, where Obamacare under another name has been the law of the state for going on four years.

Has it limited costs?  NO.  Costs are higher than every and have risen about twice as fast as originally projected.

It has achieved pretty much universal care, but that’s because A) we already were among the highest-percent-covered states, and B) the penalties under MA health reform for NOT having coverage far exceed the proposed penalties under Obamacare.

So Why Is It Interesting?

It’s interesting because it’s loaded with statistics about health care in the US.  Here are some of the really juicy things that pop out of this report:

  1. Massachusetts has the most expensive care in the US — by A LOT.  Average US family cost = $13,027.  Average MA family cost = $14,723.  That’s a whopping 13% more expensive than the average.
  2. From 2003 to 2009 average premium increase in the US was 34% for single employees and 41% for families.  In MA the increase was 51% for singles and 49% for families.  20-50% faster than the US average… so much for Obamacare controlling costs.
  3. For small companies (under 50 employees), the average single/family premium in 2009 was $4,652/$12,041.  In MA it was $5,250 (12.9% higher than US) and $14,203 (18.0% higher than the US).
  4. Large firms were $4,674/$13,210 in the US and $5,274/$14,871 in MA – so much for the oft-repeated argument that large firms have “buying power” that gives them an advantage over small firms.
  5. MA plans are, by and large, “richer” than the average US plan.  In the US, 74% of firms have deductibles, and the average deductible is $917 single and $1,761 family.  In MA, only 43% of firms have a deductible, and the average deductible is $718/$1,508.  So we remain among the most paternalistic of states.
  6. Growth in deductible size has been slower in MA than the US.  From 2003-2009 our single/family deductible has grown by 20%/41% respectively vs. 77%/63% nationally.
  7. Smaller firms are taking the lead in the deductible category in MA.  50% of small firms vs 41% of large firms had deductibles in 2009 in MA.  (Compared to 74% and 74% nationally)

From the perspective of lauding the money saving potential of Obamacare (their intended purpose), the report is useful only for wrapping fish, dead fish.  But from the standpoint of understanding where MA stands in the pantheon of states on health insurance, it’s pretty useful.

2 Comments to Just How Expensive Is Massachusetts Health Insurance?

  1. April 3, 2011 at 7:42 am | Permalink

    Thank you for this great piece of content. Best Regards

  2. Gary's Gravatar Gary
    June 28, 2012 at 3:55 pm | Permalink

    Does Massachucetts have guarantee issue? That would explain some of the expense. Insurers can charge less when they have chance of denying coverage.

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